South Africa Telecommunications Report

About This Report

Abstract:

Mobile consolidation efforts seem underway in the South African telecommunications market, despite the collapse of mobile market leader Vodacom s attempt to acquire fixed-line network operator Neotel, with Liquid Telecom entering into a purchase agreement with the latter in June of ----. With downwards pressure on traditional voice ARPUs and a renewed focus on data, Telkom has been looking for a way to strengthen its position in the mobile market. Meanwhile, Vodacom remains committed to strengthen its position in the wireline market and Cell C entered into partnerships to offer broadband. Mobile virtual network operators (MVNOs) have added to the competitive market pressures with Mr Price, a major retailer, having launched its own MVNO in ---- and me&you having launched in May ----. Both MVNOs compete with Virgin Mobile South Africa, which entered the market in ----. ...We envisage less of a sharp slowdown in growth in the latter years of our forecast. The mobile market had --.--mn mobile subscribers, representing a y-o-y growth of -.- and a q-o-q growth of -.- with penetration reaching --- .We forecast the market will grow to --.-mn

...The South African mobile subscriptions reached --.--mn in Q---, up -.- y-o-y, with penetration reaching --- . Vodacom and Cell C encountered positive customer growth in the first quarter of ----. However, MTN experienced a decline of ---,--- customers. The main source of future growth in the mobile market will be the development of -G and -G services, with the launch of LTE a clear signal that operators are preparing for intense competition based on the delivery of data services. We currently expect the number of -G and -G customers to rise to --.-mn by the end of ----, equivalent to --.-- of the mobile subscriber base by the end of ----. We forecast broadband subscriptions to increase from -.--mn in ---- to -.--mn in ----, equivalent to a penetration rate of --.-- . Increasing competition and investment pose an upside risk to this forecast with more focused contribution to the broadband market by open access players to result in a medium-term surge of growth in the number of retail broadband subscriptions.

...We estimate that South Africa s mobile market had --.--mn mobile subscribers, reflecting a y-o-y increase of -.- and a q-o-q increase of -.- . We forecast that the market will grow to --.--mn subscribers at the end of ----. ...

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